Personnel/Administrative Affairs Committee

PERSONNEL/ADMINISTRATIVE AFFAIRS COMMITTEE MAY 13, 2010 A meeting of the Personnel/Administrative Affairs Committee was held on Thursday, May 13, 2010, at 7:00 p.m. in the Aldermanic Chamber. Chairman Ben Clemons presided. Members of the Committee present: Alderman Kathy Vitale, Vice Chair (7:05 p.m.) Alderman Arthur T. Craffey, Jr. Alderman Paul M. Chasse, Jr. Alderman Richard P. Flynn Members Not in Attendance: Also in Attendance: David Fredette, Treasurer/Tax Collector INTERVIEWS – None COMMUNICATIONS – None PERIOD FOR PUBLIC COMMENT - None APPLICATION TO LICENSE HAWKER'S, PEDDLER'S, ITINERANT VENDOR'S LICENSE - None APPOINTMENTS BY THE MAYOR – None UNFINISHED BUSINESS - None NEW BUSINESS – RESOLUTIONS R-10-20 Endorsers: Mayor Donnalee Lozeau Alderman Arthur T. Craffey, Jr. UPDATING THE FINANCIAL STANDARDS FOR THE CITY’S WELFARE GUIDELINES MOTION BY ALDERMAN CHASSE TO RECOMMEND FINAL PASSAGE ON THE QUESTION Alderman Flynn I really don’t know too much about this legislation. I thought someone might be here tonight to speak to it. I believe the question was asked in Budget if the budget that came forward for the Welfare Department was presented under the assumption this resolution would pass and whatever the new guidelines and costs associated with them were factored into the new budget. I think that question was asked. Were you there that night? Chairman Clemons I don’t believe I was. Personnel – 5/13/10 Page 2 Alderman Flynn I believe that question was addressed. Chairman Clemons I don’t believe I know the answer to that although I would assume that would be the case. Oh yes it has because if you look at the resolution it says this increase has been considered in calculating the FY11 general assistance budget figures. The answer is yes. Alderman Flynn Good. Chairman Clemons Are there any further questions or comments? MOTION CARRIED NEW BUSINESS – ORDINANCES O-10-16 Endorsers:Mayor Donnalee Lozeau Alderman Richard P. Flynn AMENDING THE BOARD OF PUBLIC WORKS RETIREMENT SYSTEM MOTION BY ALDERMAN FLYNN TO RECOMMEND FINAL PASSAGE ON THE QUESTION Chairman Clemons I would ask Treasurer Fredette to please join us. Can you please give us a brief overview of what this change is and how it will affect future budgets and personnel? David Fredette It shouldn’t have any affect on future budgets. Alderman Flynn is a member of the Board of Trustees. For those who might not know, the Division of Public Works has its own pension plan, has had it since 1947, and it is run by a board of trustees made up of 5 people; one is al Alderman. Alderman Flynn is the board member. It has one person from the financial community, two division of public works employees, and one public works commissioner. I am sure you know how everybody is struggling with pension plans these days. The public works pension plan is not unique in that either. It is a fairly healthy plan. It runs currently between 83 and 91% funded. It fluctuates sometimes based on what is happening in the market. They have an actuarial study done every year and the board of trustees are basically responsible for the day-to-day operations of it and the investments. The board of trustees have made some changes over the last few years to try to keep the health of the plan strong. This is one of them here. Currently in the plan after you work 25 full years in the division of public works you can retire with full retirement benefits. This has made a change that effective July 1, 2010, anyone who starts employment would have to work 30 years to receive the full benefits. Personnel – 5/13/10 Page 3 We also eliminated an early retirement provision in there that is not used very much. They made some changes to terminology so everything is exactly the same throughout the ordinance. One section was changed so if somebody did work at the division, left, came back, and wanted to buy their years back, they would have to make that payment prior to actually starting employment. It was kind of vague the way it was written before. Those are really the changes in here. They also made it gender neutral. The outcome is as time goes on it should have a financial benefit to the plan. Chairman Clemons Thank you. I had a question related to the elimination of the early retirement benefit. What was the purpose of that early retirement and who used it in the past? David Fredette I have been involved with the plan for about 15 years. It is seldom every used because the penalty was so high for early retirement that people really couldn’t afford it. It read that if you were over 50 and had 10 years of service you could apply for an early retirement, but you would get docked for every year between the age of 50 and 60 a certain percent. They would reduce your pension. Someone who let’s say would be 60 and may get $1,000 a month, if they were 51 may get $200 a month. It was seldom every used. It was just too strong for people to take. They took that part out. The biggest change is the 30 years versus the 25 years. That is 5 more years that people would have to contribute to the plan and they would, of course, be a little older when they retire. Chairman Clemons I would just like to comment generally that this is something that I certainly can support. One of the reasons is that unlike a lot of times when these pension changes come up in different governments, they often times don’t factor in the fact the employees that are working there currently have paid into the system and are expecting to retire, in this case it would be at that 25 year level. This takes that into consideration and says that anyone hired after July 1 of this year will then have to work 30, but if you were hired before that you can retire at 25 years. I think that is a very very good compromise. I think it takes into consideration the hard work that these folks have done for the city and also tries to make sure that the fund is going to be solvent in the future. I think it is a good balance and it is something that I personally am going to support. Are there any further questions or comments? Alderman Flynn Similar to what you are saying, I think this is a pretty serious committee, a pretty hard working committee. The two representatives from within the unit are David Essensa and Carl Gagnon. It is a nice balance on the board between somebody from the board of public works, someone from the Aldermen, someone from the financial community, and two members that are involved in the plan. It does give a real genuine feeling for what the needs of the plan are. Mr. Fredette is almost always there. He is not an official member, but we rely on him pretty heavily. He comes to most of the meetings. As we go through, generally we have a period for public comment. There are usually 1 or 2 retirees there who are interested in the plan. They give us some of the feelings they have towards it. It is a nice balanced hard working group. It took us quite a few months to get where we are quite frankly Personnel – 5/13/10 Page 4 because we do have to pay the bills every month and we do spend an awful lot of time talking to the investment people that we have. They come in at least once a quarter to go over how our investments are doing, etc. I think the mix of that board is what allowed this legislation to come forward in a way of enhancing the value of the plan long term because they will have to work 30 years to be able to get the benefit as well as meeting the needs of the current members. I appreciate everybody’s hard work. Chairman Clemons Are there any further questions or comments? MOTION CARRIED DISCUSSION - None ADJOURNMENT MOTION BY ALDERMAN CHASSE TO ADJOURN MOTION CARRIED The meeting was declared closed at 7:10 p.m. Alderman Arthur T. Craffey, Jr. Committee Clerk